IGC Investigation Could Endanger Indiana Casino Projects

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Indiana casino projects in Terry Haute and Gary could be in peril as authorities conduct an investigation on illegal political contributions involving a casino executive. That probe has expanded to 10 people who may have committed financial misconduct that would violate state casino regulations or laws.

Spectacle Entertainment, the owners of the Gary Casino located along Lake Michigan, are currently working on a replacement $300M inland Casino in Gary and a $125M casino in Terry Haute. But the company is currently under fire due to allegations that its executives funneled company money to the unsuccessful 2016 campaign of a former lawmaker.

Unsuccessful Congressional Bid

The subject lawmaker is Brent Waltz, a former state senator who ran for a congressional seat but was unsuccessful. Waltz was charged with one count of conspiracy to make conduit contributions, false statements, and to obstruct justice, one count of making and receiving conduit contributions, one count of obstruction of justice, and one count of making false statements.

Former Spectacle Entertainment vice president John Keeler saw his casino license suspended last September after an indictment charged him one count of conspiracy to make illegal corporate contributions, false statements, and to obstruct justice, one count of making illegal corporate contributions, one count of obstruction of justice, and one count of making false statements.

Keeler and fellow Spectacle executive Rod Ratcliff were forced by authorities to give up their ownership in the Terry Haute casino although they allowed one business partner to proceed with the project. The two pushed lawmakers last year to allow Gary’s Casino to move from Lake Michigan to a more strategic location along interstate 80/94 in Gary and permit Terry Haute to become the first new Indiana casino since 2008.

Long Active Lobbyists

Ratcliff was not named in the federal indictment and isn’t facing any criminal charges. He however, resigned as Spectacle’s Chairman and CEO last June but was allowed to keep his share in the company.

Keeler, who was a Republican legislator for 16 years during the 80s and 90s, and Ratcliff have long been active lobbyists in the Indiana legislature on casino matters and were the owners of the two central Indiana horse track casinos until the time they were sold to Caesars Entertainment in 2018.

The Terry Haute Casino is being spearheaded by a company called Spectacle Jack. The firm is led by Greg Gibson, a businessman from Terry Haute who is also the vice-chairman of Spectacle Entertainment. In a statement released last Tuesday, Spectacle Entertainment said that Gibson wasn’t a subject of the investigation but is cooperating with state officials.

Caesars Gets One Year Reprieve For Horseshoe Casino Sale

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The Indiana Gaming Commission has granted Caesars Entertainment more time to sell the Horseshoe Casino in Hammond, Indiana.

On Monday, the IGC unanimously agreed to give Caesars a one-year reprieve to sell the Indiana casino. The commissioners sided with IGC executive director Sarah Tait who opined that selling the Horseshoe Casino right now “presents unique challenges” that include the uncertainty over the gaming expansion in illinois and the effects of the COVID-19 pandemic on the gaming industry in general.

She mentioned the lease agreement on the property as one of the reasons. The rapid expansion of the Illinois gaming market on the Chicago area of the region. Likewise, Trait mentioned the pandemic causing uncertainty in the gaming market.

Per Tait:

“Granting relief regarding divestiture timing is in the best interest of the state and local community, and will not negatively impact operations at the property.”

Complying With IGC’s Stipulations

The Horseshoe Casino is one of three Indiana casinos that the gaming giant must sell to comply with the IGC’s stipulations for El Dorado’s $17.3B acquisition of Caesars. The sales was directed to prevent an “undue economic concentration of the state’s gaming industry following the merger.

Last month, Caesars announced the sale of Tropicana Evansville to Twin River Worldwide Holdings for $480M. Earlier this month, the Eastern Band of Cherokee Indians signed a letter of intent that gives the North Carolina tribal nation a 45-day period to buy Caesars Southern Indiana.

Caesars is retaining Harrah’s Hoosier Park and Indiana Grand. The two racinos are the only properties that are situated less than an hour away from Indianapolis. Aside from that, state legislature has allowed the two tracks to offer table games this year. Caesars is planning to infuse a combined $60M to add more table games to both spots

Biggest Casino in the State

The Horseshoe Casino is the biggest Indiana casino. Located less than a mile from Chicago and the state line of Illinois, it has 2,135 electronic games and 1,105 table positions which are the most by any Indiana casino.

Per the Gaming Commission’s annual report, the Horseshoe Casino generated a revenue of $309.3M during the fiscal year. That amount is $85M more than the income of the second-largest Indiana casino. It also generated $99.8M in taxes which was nearly double the $51.1M paid by the Indiana Grand.

Horseshoe’s $24.9M in local development agreement funding outpaced the next closest Indiana casinos combined. Hotel Lawrenceburg, Tropicana, and Ameristar East Chicago which have a total of $23.1M.